Having car insurance and bike insurance for your vehicle is not only essential, but also legally mandatory. However, these insurance policies are termed and expire once the term is over (which is typically a year). Once your insurance expires, you need to renew it at the earliest or you may face both legal and financial consequences. Let us understand why renewal of vehicle insurance is so important for financial protection.
What is renewal of motor vehicle insurance?
The process of renewing the vehicle insurance policy for another term is known as renewal of motor vehicle insurance. Insurance policies are valid for a specific amount of time (term) after which they need to be renewed. This process also allows you to re-evaluate your current policy and edit or put in add-ons as per your need for the renewal. Your car will be re-inspected for renewal of car insurance if it's of age. Failing to renew an insurance policy for your motor vehicle can lead to various consequences.
Why is timely renewal of vehicle insurance crucial?
There are several financial and legal consequences of not having your vehicle insurance renewed. Here's why timely renewal of vehicle insurance is essential:
- Legal Requirement:
In most places, having at least third-party insurance policy is essential to drive a vehicle on public roads. Failure to have a valid insurance policy or carrying expired insurance may result in hefty fines and penalties. (For example, riding a bike with an expired bike insurance can lead to fines up to â¹4000)
- Financial Liability in Accidents:
Typically, damages in an accident to a third party is covered by the insurance company. However, if the insurance is expired, the entire liability from repair of the vehicle to medical expenses and legal costs lands on you. Timely renewal of insurance policy will save you from this hassle.
- Financial Stability:
The repair costs, medical expenses, damages and injuries caused during an accident are very expensive. This will create a financial burden on you if you do not have valid insurance. The money will flow from your wallet if your car was not covered with insurance. This will create financial instability for you which is easily avoidable.
- Maintaining NCBs (No-Claim Bonuses).
If you have not made any claims during the policy term, insurers reward you with a No-Claim Bonus (NCB), which helps in reducing the premium during renewal. However, if your policy expires beyond the grace period, this bonus will reset and premium rates will cost you more.
- Preventing Higher Premiums and Reinspection
Renewing insurance policy in a timely manner shows responsibility and insurance companies may help you get lower premiums. However, seeing gaps between policies and coverages make it look like high risk to the insurance companies, and thus it may increase premium rates. In some cases, insurers may also require a vehicle inspection before issuing a new policy, leading to more hassle and costs.
- Ensures peace of mind
Having an insurance policy while driving the car provides peace of mind. You can focus on the road without the constant fear of financial burden hovering over your head if your policy isn't renewed.
How to Ensure Timely Renewal of Insurance Policy?
Here are a few tips to ensure you renew your vehicle insurance policy in a timely manner:
- Set Reminders: Mark your renewal date on your calendar to avoid forgetting it.
- Select for Long-Term Policies: Some insurers offer multi-year policies, reducing the risk of missing renewal dates.
- Renew Online: Use online platforms for quick and hassle-free insurance renewal instead of waiting around at an office.
- Compare Policies: Before renewing, compare different insurers for better coverage and competitive premiums.
- Reminders from Insurance Company: Most insurance companies provide reminders through SMS or Email to the customer days before the insurance is about to expire. Keep an eye for it
Benefits of Online Motor Insurance Renewal
There are many benefits of renewing motor vehicle insurance online:
- Saves Time:
Instead of waiting in long queues, holding documents in hand and waiting for your turn, you can renew your vehicle insurance online in mere minutes. This saves a lot of time considering you can do it on the seat of your home.
- Saves Money:
Many insurance companies offer online discounts and offers for renewal of insurance policy. Also, you can easily compare other policies online and make an informative decision on which policy to choose. This method will save you a lot of money.
- Paperless and Cashless Transaction:
You can renew your insurance policy without having to worry about all the documents you need to carry, the cash you need to pay as the entire process is digital and fast, you can pay online through secure getaways and submit documents online itself.
- Online Reminders:
Most insurance companies provide reminders via SMS and Email for renewal of the policy which is a feature not possible offline.
Finishing Up
Timely renewal of insurance policy is not just a legal requirement, but a step towards financial protection. It is a responsibility that will safeguard your finances and keep you from the financial burdens that will loosen your wallets. Set reminders, auto-payment systems and take in multi-term policies to avoid failing to renew your vehicle insurance. Drive safe, Drive Securely.
FAQS
1. What happens if I miss my vehicle insurance renewal date?
If you miss your renewal date, your policy lapses, leaving you uninsured. This means you are financially unprotected in case of accidents, and you may also face legal penalties.
2. Is there a grace period for renewing vehicle insurance?
Most insurers offer a grace period (typically 15-30 days) after the policy expiry.
3. Can I renew my insurance after the grace period?
Yes, but you may face higher premiums, policy reinstatement fees, and possibly a vehicle inspection before renewal approval.
4. Will my premium increase if I renew my policy late?
Yes, allowing your policy to lapse can result in higher premiums as insurers may classify you as a higher-risk customer. You may also lose your accumulated NCB, leading to additional cost increases.
5. Can I switch insurance providers when renewing my policy?
Yes, renewal time is an excellent opportunity to compare different insurers and switch to a provider offering better coverage and competitive premiums.
